E-Readers: They're Hot Now,
But the Story Isn't Over

By

Geoffrey A. Fowler

Updated Dec. 1, 2009 12:01 a.m. ET

Books are having their iPod moment this holiday season. But buyer beware: It could also turn out to be an eight-track moment.

While e-reading devices were once considered a hobby for early adopters, Justin Timberlake is now pitching one on prime-time TV commercials for
Sony
Corp.
Meanwhile,
Amazon.com
Inc.
's Kindle e-reading device has become its top-selling product of any kind. Forrester Research estimates 900,000 e-readers will sell in the U.S. in November and December.

But e-reader buyers may be sinking cash into a technology that could become obsolete. While the shiny glass-and-metal reading gadgets offer some whiz-bang features like wirelessly downloading thousands of books, many also restrict the book-reading experience in ways that trusty paperbacks haven't, such as limiting lending to a friend. E-reader technology is changing fast, and manufacturers are aiming to address the devices' drawbacks.

"If you have the disposable income and love technology—not books—you should get a dedicated e-reader," says
Bob LiVolsi,
the founder of BooksOnBoard, the largest independent e-book store. But other people might be better-off repurposing an old laptop or spending $300 on a cheap laptop known as a netbook to use for reading. "It will give you a lot more functionality, and better leverages the family income," he says.

For gadget lovers, several factors are converging to make e-reading devices alluring this holiday season. More such devices are debuting than ever to challenge Amazon's Kindle, notably the Nook from Barnes & Noble Inc. Sony also recently launched three new versions of its Reader, which will be sold—along with devices from smaller makers like Irex Technologies BV—in dedicated e-book sections of
Best Buy
Co.
stores. Already, these devices are beginning to sell out: Barnes & Noble says people who ordered the Nook after Nov. 20 won't get one until the week of Jan. 4, and Sony says that it can't guarantee delivery of its high-end wireless Reader by Christmas.

Related

There's also more selection of books for the devices, with most popular publishers now selling e-books. Also, library-scanning efforts by
Google
Inc.
is producing more than a million out-of-copyright books like "The Adventures of Tom Sawyer" that people can download free. There are only a few holdouts against e-books, including "Harry Potter" author
J.K. Rowling.

Prices for e-book readers are also dropping. Amazon recently cut the price of the international Kindle to $259 from $279, while Sony sells a new entry-level model for $199. A refurbished first-generation Kindle retails on Amazon for $219. Amazon, Barnes & Noble and other bookstores are also discounting prices on best-selling e-book titles to $10 to lure more readers.

Still, it's unclear how—and on what sort of device—most people will be comfortable reading e-books. Many people seem perfectly happy reading books on their PCs: Reading Web site Scribd.com, which offers millions of amateur and professional works, is attracting 50 million readers each month. LibreDigital Inc., a distributor of e-books for publishers, says the overwhelming majority of e-book buyers are women who read e-books on an ordinary computer screen, mostly between 4 p.m. and 11 p.m. A growing number of readers are also perusing books on cellphones.

Most of the current crop of dedicated e-reading devices try to replicate the traditional reading experience with a screen that's about the size of a paperback novel that displays black-and-white (or, rather, dark grey and light grey) text and graphics. You turn the page by clicking on a button, or using your finger or a stylus to touch the screen. You can buy books online and transfer to them your device with a cable or, on some models, download them directly via a wireless connection. Most e-books, which cost about $10 for popular new titles, are yours at least for the life of your device, though some models let you borrow books for a short period of time from libraries or a friend.

Fans of e-readers acknowledge the devices have their flaws. Dianna Broughton, a 45-year-old stay-at-home mom in Lancaster, S.C., bought a Kindle last year and says she now "reads more, and my kids read more."

But Ms. Broughton says she can't recommend the Kindle to people who aren't technically savvy and might want to purchase their books anywhere other than the Amazon store. That's because the Kindle doesn't read copyright protected files from other bookstores or libraries. It also makes it tough for parents to monitor what their children are reading, if a child has a Kindle that is registered to his parent's Amazon account.

Comparing E-Readers

"The parent's entire e-book archive is accessible to that child's Kindle–individual titles can't be locked out," says Ms. Broughton. "Parental controls are one of the most wished-for features." There are technical work-arounds for some of these issues, but they require downloading unofficial software.

Indeed, many e-book readers place limits on how and where consumers can use them. Only the Nook allows people to share some of their books with a friend by wirelessly transmitting them—and even then, you can share each book just once and only for 14 days. And only Sony's Readers make it easy to check out free books from Overdrive Inc., the e-book service used by many public libraries.

The e-book market is also caught up in a format war, with different companies limiting their devices to certain kinds of e-books, with file types such as .azw and mobipocket on the Kindle and .epub and Adobe Digital Editions on Sony. As a result, there's no guarantee an e-book bought from one online store will work on devices sold by a competitor.

Sony has tried to differentiate itself in e-books by supporting an open industry standard called Epub and digital-rights-management software from Adobe. Barnes & Noble recently said it will do the same. But Amazon, which dominates the e-reader market, has so far shown no signs of changing from its own proprietary format.

Amazon says it is working on making Kindle books play on more devices, including iPhones, BlackBerrys and PCs.

"Our goal is to create the best possible reading experience for customers," says Amazon's vice president of Kindle, Ian Freed. "Along the way, we have figured out that it is pretty important to do that with a range of devices."

For now, the lack of interoperability in e-books has tripped up readers like Maria Blair, a 61-year-old lab technician in Baltimore. She decided to switch from the Kindle to the Sony Reader last year, because she preferred the weight and feel of the Sony. But now, "I'm not able to read the books I bought for the Kindle on my Sony," she says.

Future e-book readers may be a lot more interactive. Plastic Logic says it will launch a business-oriented reading device early next year that will offer the largest screen yet (8½ inches by 11 inches), along with tools to help business people manage their documents on the go. And while all of the dedicated e-book readers on the market this holiday season use black-and-white screens, color screens are coming late next year.

Next year,
Apple
Inc.
is also expected to debut a tablet device that can be used for reading, watching movies, surfing the Web and other interactive tasks.

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